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OF  CALIFORNIA 

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LIBRARY 


IDENTIAL 

LAW  LIBRARY 
'EES1TY  OF  CALIFORNIA 

4         ANGELES 


REPORT 

ON 

LABOR   SITUATION 


AUSTRALIA 


CONFIDENTIAL 


, 5.      Ufcr    Uor     olf 


REPORT 

ON 
LABOR  SITUATION 


T 


CONTENTS 

Page 
I.     General  Description  of  Industrial  Development 3 

II.     Administrative  Machinery  for  Dealing  with  Labor  Problems  .     4 

III.  Brief  Summary  of  the  History  of  the  Labor  Party 5 

IV.  Present  Trade  Union  Tendencies. .  7 


IS 

c- 

I 


REPORT  ON  LABOR  SITUATION  OF  AUSTRALIA 

I.     General  Description  of  Industrial  Development 

The  industrial  history  of  Australia  shows  certain  developments 
peculiar  to  itself.  Since  1890,  when  the  trade  union  movement  first 
turned  to  political  activity,  the  growth  of  this  aspect  of  the  movement 
has  been  its  most  conspicuous  feature.  A  large  proportion  of  trade 
union  activity  is  therefore  political  rather  than  industrial. 

Economic  and  social  conditions  arising  from  the  manner  in  which 
the  country  was  settled  largely  explain  the  course  of  industrial  develop- 
ment. Not  the  least  of  these  conditions  was  the  coincidence  of  the 
development  of  industrial  problems  with  the  struggle  for  such  political 
reforms  as  free  public  schools,  equal  suffrage,  immigration  restriction, 
and  liberal  land  1'aws.  The  result  of  this  coincidence  was  to  link  the 
political  and  industrial  struggles  together  and  to  give  to  the  labor  move- 
ment a  distinctly  political  character. 

The  result  of  the  infiltration  of  the  labor  movement  into  politics 
has  been  on  the  one  hand  to  bring  the  government  into  the  solution  of 
industrial  problems  to  an  unusual  degree,  and  on  the  other,  to  make 
the  Labor  Party  extremely  important  in  the  government. 

The  first  of  these  results  is  illustrated  by  the  establishment  of  State 
Courts  of  Conciliation  and  Arbitration  in  addition  to  a  Federal  Court 
for  the  same  purpose;  in  Wages  Boards  to  determine  minimum  wage 
standards  for  the  various  industries;  in  the  control  by  State  govern- 
ments of  public  utilities  such  as  railways,  docks  and  wharves,  tele- 
phone and  telegraph;  and  in  legislation  providing  for  a  minimum 
wage,  workmen's  compensation;  and  the  regulation  of  such  questions 
as  the  length  of  the  working  day,  child  labor,  etc.,  etc. 

In  theory  and  impulse,  the  Labor  Party  tends  to  be  Socialistic  and, 
while  not  definitely  committed  to  a  platform  of  state  socialism,  be- 
lieves firmly  in  the  regulation  of  industry  by  the  state. 

In  general,  the  tendency  of  labor  organization  in  Australia  is  towards 
industrial  as  opposed  to  trade  unions,  because  of  the  preponderance  of 
unskilled  labor  and  the  failure  of  trades  unions  to  encourage  skill  in  a 
particular  craft.  Latterly  a  "One-Big-Union  movement"  has  de- 

3 


74904? 


veloped  in  the  Commonwealth  with  a  platform  similar  to  the  revolu- 
tionary syndicalists  but  lacking  their  revolutionary  methods. 

The  census  of  the  year  1916  showed  705  trades  unions  with  a  total 
membership  exceeding  500,000.  Of  the  male  members  of  these 
unions,  75%  were  organized  in  federations  that  covered  the  Common- 
wealth. The  Australian  Workers'  Union,  consisting  of  workers  in 
sheep-raising,  farming  and  rural  occupations,  is  the  oldest  and  strong- 
est union  in  Australia.  Since  1911  the  predominance  of  the  pastoral 
industry  has  given  way  to  the  rapid  growth  of  manufacturing  interests. 

Industrial  disputes  are  common.  In  1913,  208  disputes  occurred, 
in  1916,  508.  -Of  these  508,  223  resulted  in  the  workers  enforcing  their 
demands,  178  resulted  in  the  employer's  favor,  84  were  compromised, 
and  23  were  indefinite  in  result.  In  319  of  the  508  cases,  settlement 
was  reached  by  direct  negotiation  between  employers  and  employees 
or  their  representatives.  Strikes  and  lockouts,  particularly  when 
confined  to  single  states  and  thus  not  subject  to  Federal  authority, 
although  penalized  by  the  Arbitration  Courts  and  discouraged  by 
labor  leaders,  occur  not  infrequently,  and  illustrate  the  restless  char- 
acter of  the  industrial  classes. 

II.  Administrative  Machinery  for  Dealing  with  Labor  Problems 

Legislation  dealing  with  labor  difficulties  began  shortly  after  the 
strike  period  from  1886-1891.  The  Wages  Board  system  (confined 
to  the  several  states)  was  at  that  time  inaugurated.  At  the  present 
time  wages  boards  are  established  in  Victoria,  Tasmania,  New  South 
Wales,  Queensland,  and  South  Australia.  The  chief  aim  of  the 
wages  board  is  to  determine  hours,  wages  and  conditions  of  employ- 
ment for  a  given  industry  or  group  of  industries  on  application  from 
the  latter.  In  most  states  penalties  are  attached  for  strikes  or  lock- 
outs which  occur  over  a  matter  in  which  the  wages  board  has  made 
a  determination.  Victoria  has  no  provision  for  penalizing  strikes,  but 
has  a  Court  of  Industrial  Appeals,  to  which  appeal  may  be  made 
against  the  Board's  decisions. 

Under  the  system  of  industrial  arbitration  courts  which  exists  in 
three  of  the  states  in  addition  to  wages  boards,  an  industry  does  not 
come  under  review  of  the  court  until  a  dispute  arises.  Most  of  the 
courts  have  power  to  summon  compulsory  conferences. 

Lack  of  uniformity  between  the  various  states  in  regard  to  the  work- 
ing of  wages  boards  and  arbitration  courts  has  latterly  given  rise  to  a 
movem3nt  for  uniform  methods. 

An  important  amendment  to  the  industrial  arbitration  act  of  New 
South  Wales  was  passed  in  March,  1918.  By  the  terms  of  the  amend- 

4 


ment  the  system  of  wages  boards  was  replaced  by  a  new  body,  known 
as  the  Board  of  Trade,  which  is  to  determine  annually  the  standard 
living  wage  within  the  state  or  any  part  of  it.  Wages  thus  determined 
are  binding.  The  Board  also  has  control  of  technical,  trade,  and 
continuation  schools.  Further  provisions  relating  to  education  for 
employment,  social  insurance,  and  general  welfare  measures  are 
included. 

The  act  also  provides  for  the  organization  of  labor  exchanges  under 
State  management,  and  establishes  a  system  of  unemployment  in- 
surance. In  addition  it  contains  a  number  of  provisions  relating  to 
trades  unions,  the  most  important  being  the  repeal  of  the  law  making 
strikes  illegal. 

In  19C4  a  Federal  Court  of  Conciliation  and  Arbitration  was  con- 
stituted to  deal  with  disputes  which  pass  beyond  the  confines  of  a 
single  state.  The  President  of  the  Federal  Court  has  power  to  call  a 
compulsory  conference  of  disputants,  and  may  thus  prevent  the 
spread  of  strikes  to  other  localities.  The  system  of  arbitration  courts 
gives  direct  encouragement  to  labor  organization  inasmuch  as  dis- 
putes before  the  courts  must  be  submitted  by  organizations  of  em- 
ployers and  employees. 

III.     Brief  Summary  of  the  History  of  the  Labor  Party 

The  Labor  Movement  began  its  political  career  in  1890  following 
the  great  strikes  of  shearers  and  seamen.  In  1891,  at  the  general 
election  in  New  South  Wales,  the  Labor  Party  won  36  seats  out  of  120. 
When  the  first  Commonwealth  Parliament  met  in  1901,  it  contained 
24  members  in  both  Houses,  out  of  a  total  membership  of  111.  In 
1910  the  Party  secured  a  majority  in  both  Houses.  A  Labor  Ministry 
held  office  for  a  few  months  in  1904  and  again  in  1908-1909.  In  1910 
the  Labor  Party  attained  office  for  three  years,  and  again  from  1914 
to  1916.  In  the  meantime  the  Party  had  been  successful  in  the  Legis- 
latures of  the  saveral  states.  By  1913  there  had  been  a  Labor  ad- 
ministration in  every  state. 

A  significant  feature  of  the  Labor  Party  organization  is  the  power 
given  to  the  caucus.  Its  decisions,  whether  carried  unanimously  or 
by  the  barest  majority,  control  the  vote  of  every  member  of  the  Party. 
The  leader  of  the  Party,  who  is  elected  by  the  caucus,  and  who  be- 
comes Premier  in  case  of  a  Parliamentary  majority,  is  therefore 
responsible  to  the  caucus  and  not  directly  to  the  people  for  his  policies 
and  administration. 

The  history  of  the  Labor  Party  during  the  war  begins  with  the 
general  election  in  September,  1914,  when  the  Party  ousted  the  Liberal 

5 


Party  by  a  generous  majority.  Originally  strongly  anti-militaristic, 
it  adopted  under  present  circumstances  and  the  efforts  of  several  of 
t  he  Party  leaders,  including  Mr.  W.  M.  Hughes,  a  strong  defense  policy 
involving  the  equipment  of  a  large  expeditionary  force. 

In  the  latter  part  of  1915,  conscription  for  foreign  service  became 
an  important  political  issue.  There  was  a  wide  spread  feeling  among 
all  classes,  including  labor,  that  the  volunteer  system  had  failed. 
Early  in  1916,  Mr.  Hughes,  then  Prime  Minister,  instituted  a  new 
recruiting  system  designed  to  raise  50,000  in  a  few  months.  The  ex 
prdient  temporarily  quieted  the  agitation  for  universal  service,  but  in 
September  the  Prime  Minister  informed  the  House  of  Representatives 
that  it  would  be  necessary  to  take  a  referendum  on  the  question  of 
sending  abroad  the  troops  authorized  by  the  Defense  Act  to  be  raised 
for  home  defense.  The  Senate  was  known  to  oppose  this  step  and 
the  Cabinet  supported  it  only  by  a  minority.  Labor  generally  was 
also  opposed. 

In  October  the  Commonwealth,  by  a  jnajority  of  over  70,000,  voted 
"No"  on  the  conscription  issue.  .The  Parliamentary  Labor  caucus 
voted  a  lack  of  confidence  in  Prime  Minister  Hughes,  which  caused 
his  resignation  from  the  Party  and  the  premiership,  and  the  formation 
of  a  National  Labor  Party  by  Mr.  Hughes  and  a  handful  of  his  fol- 
lowers. 

In  the  subsequent  readjustment  of  parties  and  issues,  Mr.  Hughes 
had  the  support  of  the  Liberalists  and  the  House  of  Representatives  of 
which  the  latter  were  a  majority,  but  he  was  bitterly  opposed  and 
distrusted  by  the  Senate  which  the  Labor  Party  dominated  and  by 
organized  labor  generally. 

The  general  election  in  1917  resulted  in  a  coalition  government  with 
Mr.  Hughes  still  Prime  Minister.  The  Labor  Party  suffered  the 
heaviest  defeat  sustained  by  any  political  party  in  the  history  of  the 
Commonwealth.  Party  leadership,  since  Mr.  Hughes'  resignation, 
had  been  weak;  the  Parliamentary  caucus  and  the  Party  itself  were 
torn  by  dissensions.  The  industrialists,  as  opposed  to  the  parlia- 
mentarians, were  becoming  more  aggressive  and  more  inclined  to 
oppose  organized  "class-conscious"  methods  to  political  activity. 

In  1918,  after  the  failure  of  a  second  referendum  on  conscription,  a 
new  recruiting  scheme  was  launched  following  a  conference  between 
the  government' and  employers  and  trade  unionists.  At  this  confer- 
ence labor's  reasons  for  refusing  to  participate  more  heartily  in  re- 
cruiting were  presented  to  the  government.  The  conference  reached 
no  satisfactory  conclusion,  but  in  spite  of  this  fact,  recruiting  figures 
grew  rapidly  during  the  succeeding  months. 

In  June  the  Labor  Party,  called  since  the  split  the  Australian  Labor 

6 


Party,  met  in  conference  at  Perth.  The  main  discussion  of  the  con- 
ference centered  on  the  formulation  of  the  Party's  attitude  towards 
recruiting.  A  resolution  was  there  taken  stating  that  further  par- 
ticipation in  recruiting  would  be  subject  to  two  conditions:  (1)  a  state- 
ment on  behalf  of  the  Allies  asserting  their  readiness  to  enter  into  peace 
negotiations  upon  a  basis  of  no  annexations  and  no  indemnities,  and 
(2)  that  Australia's  requirements  in  man-power  be  met  with  respect 
to  home  defense  and  industrial  requirements. 

It  was  voted  by  the  conference  to  submit  this  resolution  to  the 
organization  membership  for  approval.  Immediately  vigorous  dis- 
sension arose  between  factions  of  the  conference  holding  opposing 
views  on  the  resolution.  The  New  South  Wales  labor  members 
issued  a  manifesto  calling  on  their  constituency  to  vote  against  the 
resolution.  South  Australia  and  Tasmania  subsequently  defied  the 
conference  by  refusing  to  vote  on  the  referendum.  Sections  of  labor 
in  other  states  also  refused  to  vote.  Labor  leaders  themselves  were 
in  open  disagreement  on  the  issue.  Nothing  since  the  conscription 
referendum  has  so  agitated  the  ranks  of  the  labor  organization. 
Many  of  the  Labor  Party  feel  disgraced  by  what  is  regarded  as  a 
painful  exhibition  of  disloyalty  and  cowardice,  which  they  explain  by 
the  rising  influence  of  the  insurgent  labor  elements.  This  faction 
also  feels  that  the  Perth  conference  makes  the  Labor  Party's  return  to 
power  almost  a  forlorn  hope. 

The  National  Labor  Party,  on  the  other  hand,  stood  solidly  behind 
a  vigorous  prosecution  of  the  war.  Its  mouthpiece  and  main  strength 
is  Mr.  Hughes,  whom  the  Australian  Labor  Party  and  the  labor  press 
have  vigorously  repudiated. 

IV.     Present  Trade  Union  Tendencies 

Tendencies  in  labor  organization  may  be  briefly  described  by  the 
growth  in  power  of  the  more  radical  elements.  The  One-Big-Union 
movement  has  finally  achieved  success  in  New  South  Wales  and 
Victoria  where  the  majority  of  the  most  powerful  labor  bodies  are 
said  to  be  lending  it  their  support.  Other  states  are  expected  to 
follow,  which  seems  to  assure  the  success  of  the  organization.  While 
it  is  denied  that  the  One-Big-Union  movement  is  an  attempt  on  the 
part  of  the  I.W.W.  to  capture  Australian  industrial  organization,  it 
does  represent  a  triumph  of  their  principles.  The  scheme  of  organiza- 
tion and  the  preamble  of  the  I.W.W.  have  been  adopted  without 
change  by  the  new  organization.  The  aims  of  the  I.W.W.  have 
long  been  held  by  many  of  the  rank  and  file  of  the  unions  and  have 
been  openly  advocated  by  militant  sections  of  almost  every  state 

7 


federation.  The  I.W.W.  itself,  on  the  other  hand,  has  always  been  a 
small  though  aggressive  organization. 

The  success  of  the  One-Big-Union  movement  is  laid  to  the  increase 
of  industrial  unrest  since  the  war.  Strikes  and  labor  disputes  have 
been  frequent.  Increased  cost  of  living  has  caused  repeated  applica- 
tions for  new  awards  to  be  made  to  wages  boards  by  the  same  industry. 
Delays  in  awards  have  added  to  irritation  and  caused  dissatisfaction 
with  the  system. 

The  success  of  the  Labor  Party,  while  in  power,  has  also  tended  to 
increase  unrest  by  increasing  the  assertiveness  of  the  industrial 
classes.  Moreover  the  important  issues  of  the  war  have  served  to 
accentuate  the  difference  between  radical  and  conservative  labor 
elements,  and  have  given  the  former  an  opportunity  to  win  to  them- 
selves an  increasing  number  of  adherents.  The  vote  against  con- 
scription and  the  Perth  conference  are  two  illustrations  in  point. 
The  defeat  of  the  Federal  Labor  Party  in  1917  served  to  strengthen 
the  industrial  unionist  wing  of  the  labor  movement. 

Recent  press  reports  from  Australia  indicate  that  the  government  is 
being  heckled  to  release  political  prisoners  and  repeal  the  War  Pre- 
cautions Act  which  has  been  a  bone  of  contention  to  the  labor  groups 
for  many  months.  At  last  reports,  the  government  is  opposing  the 
repeal  of  the  measure. 


8  NOV  2  1    1952 


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